Sterilization, monetary policy, and global financial integration

Joshua Aizenman, Reuven Glick

Research output: Contribution to journalArticlepeer-review

60 Scopus citations


This paper investigates the changing pattern and efficacy of sterilization within emerging market countries as they liberalize markets and integrate with the world economy. We estimate the marginal propensity to sterilize foreign asset accumulation associated with net balance of payments inflows, across countries, and over time. We find that the extent of sterilization of foreign reserve inflows has risen in recent years to varying degrees in Asia as well as in Latin America, consistent with greater concerns about the potential inflationary impact of reserve inflows. We also find that sterilization depends on the composition of balance of payments inflows.

Original languageEnglish
Pages (from-to)777-801
Number of pages25
JournalReview of International Economics
Issue number4
StatePublished - 28 Aug 2009
Externally publishedYes

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development


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